US ban has no impact, says Huawei

Business | AP and Avery Chen 22 May 2019

The founder of Huawei expressed confidence Washington's curbs on sales to the Chinese tech giant will have little impact and said yesterday it is discussing "emergency relief" from Google for possible loss of services for its smartphone business.

Huawei Technologies, the biggest maker of network gear for phone carriers, has "supply backups" if it loses access to American components, Ren Zhengfei told Chinese reporters.

The Trump administration's order last week steps up pressure on Huawei, which Washington says is a security risk, and threatens to hamper sales of network gear and other products. Huawei is the No. 2 global smartphone brand but relies on Google's Android operating system and US components suppliers.

The US controls "will have no impact within this company" and none on development of next-generation telecom technology, Ren said. He said some low-end business might be affected.

Huawei and Google are discussing possible "emergency relief measures" for its smartphone business, which might lose access to some of the American company's services, Ren said.

Google said its basic services still will work on Huawei smartphones, which use its Android operating system.

Google gave no details of what services might be curtailed. But the company would be barred from transferring hardware or software directly to Huawei. That would affect maps or other services that require the American company's support.

A Chinese foreign ministry spokesman accused Washington of misusing "state power" to hurt foreign companies and interfere in commercial markets.

"The Chinese government has determination and ability to safeguard its legitimate and lawful rights and interests," said the spokesman, Lu Kang.

Apple makes a prominent potential target for Beijing. The company's iPhones are assembled in China and the country is its No. 2 market after the United States.

In other news, ZTE (0763) said yesterday that it has not yet made any comment about the commercial launch of 5G in China.

China Daily reported earlier that China plans to start commercial use of 5G on October 1 and Huawei, ZTE and Ericsson will supply equipment for the 5G base stations, citing ZTE's deputy manager Michael Gao Wenhao.

ZTE said in its official Weibo account that "there was a misunderstanding in the spread of information."

Meanwhile, 5G-related stocks rebounded yesterday on the news of the US Commerce Department granting a 90-day temporary general license for Huawei and its partners. ZTE rose 2.7 percent to HK$20.15, while Comba Telecom Systems (2342) increased by 4.05 percent to HK$1.54.

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